Vietnam Still Living On FIE Exports

Import/exports continued to increase in Q1 2018

The saying ‘The first month (of the Lunar Year) is the time to play’ is no longer true in the global era. Within seven days of the New Year holiday, Vietnamese enterprises exported $289 million worth of products, up by 50 percent, and imported $604 million, up by 45.7 percent compared with last year. 

Vegetables and fruits were among the key export items with a growth rate of 35.6 percent, a significant achievement if noting that six out of nine farm and seafood produce have seen export turnover decline. 

Vietnam’s fruits entered choosy markets, the result of efforts to focus on quality improvement and high added-value exports instead of trying to export as much as possible.

Among the fastest-growing export products, industrial and manufacturing products were much higher in value, with turnover accounting for 83.3 percent of total export turnover in the first quarter.

Phones, mostly from foreign invested enterprises (FIEs), were still leading in export turnover, gaining $12.3 billion, twice as much as turnover from farm and seafood products ($5.9 billion).

As for steel, Vietnam’s export volume increased by 28.5 percent, but export turnover soared by 38.5 percent as the exports to the US had a price higher than the average export price.

The US remains one of Vietnam’s big steel importers. However,  the future is unclear as the US plans to impose a new tariff on Vietnam’s steel and aluminum products.

Concerns

The modest seafood export turnover is a big surprise. Only $1.6 billion worth of seafood exports were collected in the first quarter, which means that Vietnam needs to export $2 billion worth of products at least each quarter in the next three quarters to be able to get growth in 2018.

The target is a challenge for Vietnam as the EU has issued a yellow card warning to Vietnam over its fisheries exploitation. If the situation worsens, the red card will be issued.

Vietnam’s catfish industry is meeting difficulties from all sides. The US has imposed high anti-dumping duties on Vietnam’s catfish, while Saudi Arabia has announced the suspension of Vietnamese seafood imports.

Another big concern is that imports have been reaching every corner of the domestic market, including farm produce. Soc Trang’s purple onion price dropped dramatically after Tet, partly because it had to compete with imports from China and India.

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